In a statement the Department for Work and Pensions said: "We have been absolutely clear that the £320 million budget for specialist disability employment services has been protected. But by spending the money more effectively, we can support thousands more disabled people in work.

That is why we accepted the recommendation from disability expert Liz Sayce, to focus support on individuals through services like Access to Work, rather than institutions like Remploy, so more disabled people can work in mainstream employment rather than segregated factories."

The Government has confirmed the closure of 27 factories Credit: ITV News

Maria Miller, the minister for disabled people, told MPs that the £320 million budget for disabled employment services could be spent more effectively:

This is difficult news. We are doing everything we can to ensure that Remploy workers will receive a comprehensive package of support and guidance to make the transition from Government-funded sheltered employment to mainstream jobs... Our approach has been led by disabled people's organisations and disabled people themselves, many of whom have welcomed the move to end the pre-war practice of segregated employment.

The Minister for Disabled People Maria Miller said the government would support Remploy workers who wanted to take over the factories they work in. The Remploy organisation provides employment services for disabled people.